Sat, Jun 13, 2009 - Page 11 News List

Higher Qualcomm forecast may bode well for TSMC

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Qualcomm Inc’s higher forecast for third-quarter sales may boost the prospects of its chip suppliers, including Taiwan Semiconductor Manufacturing Co (TSMC, 台積電).

TSMC is Qualcomm’s biggest provider of chips and receives 7.5 percent of its revenue from the US company, New York-based research firm Connexiti LLC said.

“We said before Qualcomm that Taiwan Semi would beat sales estimates,” Richard Davenport, Connexiti’s director of research, said on Thursday in an interview. “This result today gives us even more confidence in that.”

The rise in chip sales is being driven by higher demand for sophisticated mobile phones and faster data networks, particularly development of a high-speed network in China, Davenport said.

Qualcomm, the world’s biggest maker of mobile-phone chips, raised its forecast for third-quarter sales to at least US$2.67 billion, from an earlier prediction of as much as US$2.6 billion, a statement from the San Diego-based company said on Thursday.

Also benefiting from Qualcomm’s higher demand are Chartered Semiconductor Manufacturing Ltd (特許) and United Microelectronics Corp (UMC, 聯電), Connexiti said.

Qualcomm provides 12 percent of sales at Chartered, based in Singapore, and 9.3 percent at Taiwan-based UMC, Connexiti said.

Meanwhile, Chartered Semiconductor, the world’s third-largest maker of customized chips, said it expected to post a better-than-expected net loss of between US$45 million and US$53 million in the second quarter.

The company forecast a net loss of between US$54 million and US$64 million on April 24.

“We are seeing incremental improvement in our business, mainly from our mature technologies,” chief financial officer George Thomas said yesterday.

In China, Semiconductor Manufacturing International Corp (SMIC, 中芯) said Chinese demand for its products was recovering, with orders in the third-quarter to be “better” than the second.

“Starting in January this year, every month is better than the previous one and the trend has continued for five months already,” SMIC chief executive officer Richard Chang (張汝京) said in at his office in Shanghai on Thursday. “From the forecasts we’ve received for the third quarter, we can see that, yes, it is very clearly a recovery trend.”

SMIC is China’s biggest chipmaker on a contract basis. Increased sales in China may help it post annual profit next year, Chang said. The chipmaker reported losses for each of the past four years.

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